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Cambodia: Levi Strauss quits garment factory amid on-going strike

U.S. jeans giant turns back on workers seeking higher pay and better working conditions

Last week jeans giant Levi Strauss confirmed that it stopped sourcing garments from Singapore-owned SL Garment Processing (Cambodia). Workers at the factory, which still produces clothes for the US brand Gap, have been on strike for almost two months, demanding an increase of minimum wage to $150 per month, the reinstatement of fired union leaders and the sacking of a company shareholder.

In an e-mail to Phnom Penh Post, Clara So, director of corporate affairs for Levi Strauss in the Asia Pacific region said the move came after one year of work with SL to meet the brand’s requirements. She did not stipulate when the decision to sever ties with the factory was taken.

“Like any company, we regularly assess our manufacturing relationships based on a number of criteria, including business rationale, manufacturing standards and vendor code of conduct,” she wrote.

Cambodia’s apparel sector, which accounts for over 80% of the country’s total exports, has been a lifeline for this Southeast Asian country for years. Low wages and the government’s zeal to attract investment has made it a perfect destination for foreign businesses that make their fortunes producing apparel for western brands.

But many factory workers are no longer willing to work for next-to-nothing pay and are increasingly demanding higher wages and respect for labour standards, challenging factory owners and forcing international buyers to have a closer look at their supply chain.

SL Garment made the headlines in early August when almost 4,000 factory workers walked out of the job as union members demanded that it severs ties with Meas Sotha, a key shareholder, after he ordered a military police presence at the factory. An arrangement the Coalition of Cambodian Apparel Workers Democratic Union (C.CAWDU) said was meant to intimidate unionised workers.

Sotha could not be reached for comment but at the time refuted allegations of intimidation and defended the military‘s presence at the factory, claiming the forces were at the premises to protect the workers.

Ken Loo of the Garment Manufacturers Association of Cambodia told Asian Correspondentthat while he did not know the exact reason for Levi’s decision, the strikes might have played a role.

“Many workers don’t understand that their actions will have an impact on the company’s operations and when this happens businesses could choose to go to a factory that does not have such problems,“ he said.

Levi’s move to abandon SL Garment poses questions asked time and again when rights abuses at factories in developing countries come under the spotlight: should corporations stop sourcing from “bad suppliers“ or should they use their leverage to improve the situation for the workers?

C.CAWDU director, Ath Thun, said the denim brand should have stayed on and backed the workers in their struggle for a decent wage and improved working conditions. “Levi Strauss cannot abandon the workers like that. As a buyer it has a responsibility to the workers and it should push SL Garment to reach an agreement and meet their financial and other demands,” he said.

In her article for the Guardian newspaper Helena Wright, a doctoral researcher at Imperial College London, claimed that companies that pull out from poorly run factories are punishing workers twice, first with the lack of monitoring standards and second by taking away jobs. And while SL is not closing its doors, at least yet, media reports allege that aside from the cancellation from Levi‘s, Gap and H&M have reduced their orders with the factory since August.

Levi’s decision to sever ties with SL also seems to be at odds with its own policies and codes of conduct. The company’s public policy for example pledges to support workers rights and especially the implementation of relevant legal frameworks in its supply chains. In 2011, the then CEO John Anderson announced new Terms of Engagement for its global supply chain, stating that Levi’s must partner with factories to empower workers.

“We are proposing a new apparel industry standard of social, economic, and environmental sustainability that focuses on improving workers’ lives. If our ultimate goal is to improve not just factory conditions, but to make a material difference to the people and communities in our supply chain, then we need a more holistic approach and a more human perspective,” he said in a speech.

As pointed out recently by former UN Special Representative for Business and Human Rights, professor John Ruggie, companies can no longer hide behind policy statements and claim respect and support for labour rights – their declarations need to be backed by actions.

“…[M]ere declarations of respect by business no longer suffice: companies must have systems in place to know and show that they respect rights…[T]o all the [business] leaders gathered here today:…the cost of getting it wrong is incalculable while the opportunities from getting it right are legion…[T]here’s really only one thing for us to do: let’s get it right,“ Ruggie saidduring a September meeting run by the UN Global Compact, an initiative that organizes global, multi-stakeholder dialogues on corporate citizenship issues and one in which Levi’s is a participating company.